Avnija Ahluwalia vs Mr. Bikramjit Ahluwalia & Ors.
2011 Latest Caselaw 702 Del

         THE HIGH COURT OF DELHI AT NEW DELHI

%                    Judgment Reserved on: 31.01.2011
                     Judgment Pronounced on: 07.02.2011

+           I.A. No. 11007/2010 in IPA No.29/2009

Avnija Ahluwalia                                 .....Petitioner

                            - versus -

Mr. Bikramjit Ahluwalia & Ors.                  ....Respondents

Advocates who appeared in this case:

For the Petitioner: Ms. Pinky Anand, Sr. Adv. with Mr. Attin Shankar Rastogi, Adv.

For the Respondents: Mr. Y.P. Narula, Sr. Adv. with Mr. Aniruddha Choudhury, Adv.

CORAM:-

HON'BLE MR JUSTICE V.K. JAIN

1. Whether Reporters of local papers may No. be allowed to see the judgment?

2. To be referred to the Reporter or not? No.

3. Whether the judgment should be reported No. in Digest?

V.K. JAIN, J

1. This is an application by respondent Nos. 7 to 16

for deleting their names from the array of respondents.

2. This is a suit/petition filed by the petitioner as an

indigent person seeking declaration, partition and rendition

of accounts. The petitioner is the daughter of respondent

No.2 Mr. Vikaas Ahluwalia whereas respondent No.1 is his

father. Respondent No.3 is the wife of respondent No.1

whereas respondents No. 4 to 6 are his daughters. It is

alleged in the plaint that a construction business was

started by respondent No.1 Mr. Vikaas Ahluwalia with his

late father Mr. Karamchand Ahluwalia, with the nucleus of

HUF funds. As the business grew, a private limited

company namely Ahluwalia Contracts Private (India) Limited

was set up in the year 1979. Respondent Nos. 2 to 6 were

allotted shares in the company from the funds of joint

family. Subsequently, it was converted into M/s Ahluwalia

Contracts (India) Limited (respondent No.7). It is further

alleged that respondents 8 to 16 were later incorporated and

are closely held by the respondents and other family

members in which joint family funds have been blended.

3. Schedule-A to the petition describes the property

alleged to have been purchased from the HUF funds

whereas Schedule-B to the petition gives details of various

joint family businesses. The plaintiff has sought a decree of

partition of the properties and business detailed in

Schedules A and B besides seeking rendition of accounts in

respect of shares, deposits, dividends of the petitioner in the

joint family business as detailed in Schedule B. Though the

heading indicates as if it is a suit for declaration, partition

and renditions of accounts, no declaration has actually been

sought by the petitioner.

4. It is alleged in the application that the applicants

are private limited companies duly incorporated under the

Companies Act and none of the reliefs sought by the

petitioner can be granted against them, they being juristic

persons and their assets cannot form part of any HUF since

shareholders of a company have no right in its assets.

5. The application is opposed by the petitioner. It is

alleged in the reply that respondent No.7 is the main

company, which was incorporated by late Mr. Karamchand

Ahluwalia along with his family whereas respondent Nos. 8

to 16 have either been jointly promoted by respondent No.7

or are its subsidiaries and, therefore, all of them are

necessary parties to the suit.

6. Order I Rule 10(2) of the Code of Civil Procedure, to

the extent it is relevant, provides that the court may at any

stage of the proceedings, either upon or without the

application of either party, and on such terms as may

appear to the Court to be just, order that the name of any

party improperly joined, whether as plaintiff or defendant,

be struck out.

7. It is settled proposition of law that only co-owners

of a joint property/estate are necessary and proper parties

in a suit for partition. The case of the petitioner is that on

her birth, she became a member of the HUF, which was

headed by late Mr. Karamchand Ahluwalia, who was the

father of respondent No.1. The properties owned by a

company, which is a juristic person and is a legal entity

separate in law from its shareholders cannot be deemed to

be the property of its shareholders. The shareholders of a

company are entitled only to the dividend, if any, declared

from time to time by the company in which they hold shares

and in the event of winding up of the company, they are

entitled to proportionate share in its net assets, if any.

8. It was observed by this Court in Badri Pershad v.

Harish Chander and Another, 1991 (21) DRJ 41 that the

co-owners of joint property are the only necessary and

proper parties in a suit for partition because it is only those

persons, who are co-owners/joint owners, who have right,

title and interest in the property sought to be partitioned.

Since the applicants/respondent Nos. 7 to 16 are corporate

entities, they could not have been the members of the HUF,

which, according to the petitioner, was headed by late Mr.

Karamchand Ahluwalia. Even if one or more members of an

HUF have 100% shareholding in a company, the property

owned by the company cannot be said to be the property

owned by them, so long as the company is not wound up.

This is not the case of the petitioner that any property

owned by the HUF was transferred by any of the members

of the HUF to any of the respondents out of respondent Nos.

7 to 16 by way of sale or otherwise.

9. It is true that some of the properties, which stand

in the name of one or more out of respondent Nos. 7 to 16,

are claimed by the petitioner to be the properties of the HUF

but the petitioner has not sought either a declaration to the

effect that these properties belong to the HUF nor has she

sought cancellation of the title deeds whereby those

properties were acquired by these corporates. In the

absence of such a prayer, it is not open to the Court to go

into the question of ownership of those properties and grant

a decree of partition in respect of one or more of such

properties.

10. For the reasons given in the preceding paragraphs,

I am of the view that respondent Nos. 7 to 16 are neither

necessary nor proper parties to this petition. Their names

are, therefore, struck off from the array of respondents. The

petitioner is directed to file amended memo of parties within

one week.

11. The application stands disposed of.

(V.K. JAIN) SJUDGE

FEBRUARY 07, 2011 vk